A common way to figure out how much a country owes compared to the total value of the goods and services it makes in a year is to look at the debt-to-GDP ratio. This ratio, which is shown as a percentage, shows how well a country can pay off its debt with the money it makes each year.

In simple terms, it shows how much debt a country has compared to how much work it does. A lower ratio usually means that someone is better at handling debt, while a higher ratio means that they might be in financial trouble.

Debt-To-GDP Ratio Formula

The ratio is calculated using a simple formula:

Debt-to-GDP Ratio (%) = (Total National Debt / Total GDP) × 100

Here, Total National Debt represents the government’s total outstanding debt, and Total GDP represents the value of all goods and services produced within the country in a given year.

Example Calculation

Country	Total Debt	GDP	Debt-to-GDP Ratio
Country #1	$22	$12	183.33%
Country #2	$6	$9	66.67%
Country #3	$110	$150	73.33%
Country #4	$9	$5	180.00%